U.S. LNG developer Venture Global doesn’t need additional time to start up production at its Calcasieu Pass LNG facility, its customer BP has told U.S. regulators.
The UK-based energy supermajor, along with Shell, Repsol, Eni, and Edison, became foundational buyers of Venture Global’s LNG even before it started producing. They paid for the construction of the Calcasieu Pass facility and secured long-term supply from it.
The facility started producing in early 2022—right on time for Europe, which was beginning to experience a shortage. But instead of honoring its contracts with the European buyers, Venture Global chose to sell more LNG on the spot market.
Venture Global has delayed deliveries to these clients while selling LNG on the spot market, which has made it billions. As for the delay in deliveries to the long-term customers, Venture Global explained it with force majeure because of technical problems with the power supply. As they learned these problems hadn’t stopped the company from producing enough LNG to sell on the spot market, the European buyers got a bit angry.
At the end of last year, BP asked FERC to force Venture Global to disclose the documentation around its force majeure—which Venture Global wants to keep confidential.
Earlier this year, FERC ordered Venture Global LNG to provide its customers with documents about the mechanical problems and startup of Calcasieu Pass LNG.
Now BP, after reviewing the documents, told the regulator, as carried by Reuters, that it “reiterates its position that no extension is required” for Venture Global to launch the official start-up.
Venture Global, meanwhile, seeks to boost its sales of the super-chilled fuel and bought earlier this year nine new LNG vessels that are currently under construction in South Korea and will be delivered starting later this year.
“We are sending a strong signal to the global market of our long-term commitment to meeting the world’s growing energy demand at a large scale, bolstering the security of our customers and allies by providing them with clean, affordable, and reliable U.S. LNG as efficiently as possible,” Venture Global CEO Mike Sabel said in March.
By Tsvetana Paraskova for Oilprice.com
